eMusic CEO: unlimited iTunes is anti-trust material

updated 05:45 pm EDT, Thu March 20, 2008

by MacNN Staff

Pakman blasts iTunes idea

Despite a lack of official word from Apple in terms of a "Comes with Music"-style unlimited iTunes download plan, the concept is drawing heavy criticism, especially from eMusic CEO David Pakman. Many in the industry are trying to predict Apple's moves before any official announcement [1|2], and Pakman claims that a potential unlimited plan would rank Apple alongside Microsoft in terms of monopolistic behavior, due to the company's market dominance with the venerable iPod, according toWired.

"They're basically saying, 'Let's give a piece of every iPod sale to the record labels in exchange for bundling in all the music you can eat with every iPod'" said Pakman. "That's classic Sherman Antitrust Act behavior. It's called tying, and it's where a company with a monopoly position in one market uses that monopoly position unfairly to compete in another."

Pakman draws parallels of the scenario to Microsoft's inclusion of Internet Explorer with Windows, which arguably killed Netscape as a neck-and-neck competitor.

"The troubling thought to many of us is that it's a very logical step on Apple's part," admits Pakman. "But because they're a monopolist, they're going to be held to a different standard."

have more credibility coming from someone who isnt competing with Apple for music sales

And Apple is not a monopolist by any means

"a company or group having exclusive control over a commodity or service"

There are both many other mp3 players and music stores to choose from. Just because Apple makes the most popular one, does not make them a monopolist.

And.. I saw this on Wiki about the Sherman Act

"The Sherman Act was not specifically intended to prevent the dominance of an industry by a specific company, despite misconceptions to the contrary. According to Senator George h***, an author of the bill, any company that "got the whole business because nobody could do it as well as he could" would not be in violation of the act."

You dont have to buy an Ipod .. you can choose from dozens of other music players.

You wont have to buy a premium Ipod, you could choose a non premium Ipod without the all you can eat.

Even if you were forced to buy the premium Ipod (at your choice) you can still buy music from other sources and put any mp3 on your ipod

eMusic translation .... "s*** we dont like having to compete with itunes"

Itunes / Ipod have only become popular because it's the peoples choice .... no one forces people to buy Ipods or use itunes and you have plenty of other choices ... it's simple , those other choices are not as good so people dont choose them.

Can somebody explain to me what anti-trust is? According this the article above, it seems to be the notion that a company utilize and partner with other services to create a whole package much greater than the parts which create it.

Now, if creating this relationship with the music industries created an environment that blocked or hindered other services, that could be anti-trust. In this case, consumers choose one environment over another. These people confuse anti-trust with consumer-choice. Nothing prevents me from buying music from eMusic except my choice. And, the only thing that would prevent me from using uMusic on an iPod would be eMusic, not Apple.

They don't open up Itunes to anyone else. The Fist-F#ck consumer's every chance they get. Thye stiffle innovation. The create deals that hurt other companies trying to compete. Apple want to control everything about their platform. You Isheep should grow brains.

Coke-A-Cola doesn't open up their recipe to anyone else? They'll lock you up every chance they get it they catch you trying to look at their formula! They are always running promotions to beat out Pepsi. Coke wants to control everything about their formula/recipe. Who here really needs the brains???

The general point here is that if the deal was as described - you purchase an iPod with a $50 iTunes all-you-can-eat option with it, then emusic will have been squeezed out of a market they are legitimately in at the moment - which is selling MP3 files for iPods.

They've even developed client software that automatically copies files from their shop into your iTunes library, rather than trying to push consumers towards WMA players, etc, which is the main reason they are second behind iTunes - that and being very competitive on price.

The comparison would be - if Amazon were to do it, that is fair game - neither Amazon or emusic have any control over the iTMS or iPod. If Apple were to do it, that is different, and it DOES have shades of IE and Netscape. You can guarantee you would not be able to purchase an iPod + one of a competing number of subscription plans.

(And yes, emusic could partner with another hardware player but that is NOT the business they're in. They're the people who pioneered a non-DRM based subscription site, for which we should cut them some slack).

But Bubuschoeny - take a chill pill. Yes, isheep should realise they are just another company, out to make as much money as they can. That doesn't mean they're ripping off or abusing their consumers. Making higher profits by selling stuff people don't need but do want is not, in the grand scheme of things, that evil.

Making hardball business deals with partners is the way of the world (even Google do it outside all the cutesy fluffy side).

"They stiffle innovation"?! Outside of Peer to Peer or Bittorrent pirating how long would you have had to wait for eMusic, Buy.com, Walmart, Amazon, Kazaa, Napster, MS Zune and the Social, etc. to create a user friendly, pay for music eco system combining a digital music player, software for browsing and purchasing digital music and a digital music store???

eMusic is one of the more popular music stores after the iTMS. That's because #1) it has a different model (subscription for x number of songs per month). Even this rumored new iTMS service is different than eMusic's approach; #2) eMusic only deals in independent labels, offering DRM-free, 192kbps MP3.

There is room in the market for both of these stores. Also, eMusic only benefits from more iPods sold. They emphasize quite heavily in their ads that their downloads are "compatible with all music players, including the iPod."

In short, I can't see any reason that eMusic will suffer over this rumored new plan, and no reason for their CEO to complain.

if Apple would sell me an iPod / iPhone with all the music I could download. Yea. I guess the eMusac dork won't like my idea though. then again would I buy if some other company sold me a player with free music. Sure, i would and then put them all on my iPod. Hey eMusac dork, it is not only about music, it is also about the pod dude. Get your head straight.

"Even if you were forced to buy the premium Ipod (at your choice) you can still buy music from other sources and put any mp3 on your ipod "
This is *exactly* the situation with IE and Netscape:you could install Netscape, but why bother since IE was included for the same price and did the same (or was supposed to do the same)?
*If* Apple was to sell iPods with free music subscriptions (or very cheap music subscription), then they could be in the same situation as Microsoft vs Netscape. However, if they just propose another choice which is to buy an iPod for the price of a regular iPod plus the price of the average music subscription found elsewhere today, then I don't think it should be a problem.
Being the dominant player (or even a monopoly) does not prevent a company from competing with others, but rules apply to make sure this domination is not used to dominate another market (here it would be domination in the MP3 player market or/and in the music e-sales used to gain dominance of the subscription market; if you consider subscriptions are part of the music market, then the same argument still holds).
Anyway, Nobody knows what Apple will do, and if they do what is discussed here, we don't know how they would do it. So...

If you have something that someone else wants, you can use that to negotiate better deals, how is that anti-trust. It is no different than a free agent athlete who brings a lot of skill to the team negotiating for better pay. They have market dominance because they have something people want, no one is forcing anyone to buy an iPod, it is just the best solution available, why not use that fact to negotiate deals?

it is also unfair to compare Windows with Internet Explorer (IE) to iPod with iTunes. When MS Windows was including IE it had 95 % of the market share and there was NOT the option to exclude IE if you purchased Windows.

With iPod and iTunes, you music from any source you would like. For example, you can rip your own CDs or you can by MP3s from Amazon or any other source.

Pakman is a dolt. What a joke? He shuns competition in the same way he expects everyone to hand him things for FREE. Like he holds the cards? You get ahead in this life for working harder and being more creative, not for being a cry baby.

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